A Contingent Liability Is Defined as A A) I
B) II

question 19

Multiple Choice

A contingent liability is defined as a: $\begin{array}{|l|l|l|l|l|} \hline& \text { I } & \text { II } & \text { III } & \text { IV } \\\hline \text { possible obligation that arises from past events. } & \text { Yes } & \text { Yes } & \text { No } & \text { No } \\\hline \begin{array}{l}\text { possible obligation whose existence will be confirmed } \\\text { by the occurrence of an uncertain future event. }\end{array} & \text { Yes } & \text { No } & \text { Yes } & \text { No } \\\hline \begin{array}{l}\text { present obligation not recognised because the outflow } \\\text { of economicbenefits to settle the obligation is not } \\\text { probable. }\end{array} & \text { Yes } & \text { No } & \text { Yes } & \text { No } \\\hline \text { present obligation that is measured reliably. } & \text { No } & \text { No } & \text { Yes } & \text { Yes }\\\hline\end{array}$

• A) I.
• B) II.
• C) III.
• D) IV.

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Definitions:

Holder-in-due-course Status

A legal status that provides a holder of a negotiable instrument certain rights, free from many defenses and claims that could be asserted against the original party.

Fraud in the Inducement

A type of fraud that occurs when false statements, promises, or misrepresentations lead another to enter into a contract or agreement.

Unauthorized Completion

The act of finishing or filling out a document or contract without the explicit authorization or consent of all parties involved.

Material Alteration

A significant change to a document or agreement that affects its legal obligations or rights.